Sprint - Nextel 2005 Annual Report Download - page 26

• establish access and universal service funding provisions,
• impose fines and forfeitures for violations of FCC rules,
• regulate the technical standards governing wireless services, and
• impose other obligations that it determines to be in the public interest.
We hold several kinds of licenses to deploy our services: 1.9 GHz PCS licenses utilized in our CDMA network,
and 800 MHz and 900 MHz licenses utilized in our iDEN network. We also hold 2.1 GHz BRS licenses, 2.5 GHz
BRS licenses, and we lease use of others’ 2.5 GHz BRS and EBS licenses, for our first generation fixed wireless
Internet access service. We also hold and lease 2.5 GHz, 1.9 GHz and other FCC licenses that we currently do
not utilize in our networks or operations.
1.9 GHz PCS License Conditions
All PCS licenses are granted for ten-year terms. For purposes of issuing PCS licenses, the FCC utilizes major
trading areas, or MTA, and basic trading areas, or BTA, with several BTAs making up each MTA. Licenses may
be revoked if the FCC’s construction requirements are not met. We have met these requirements in all of our
MTA and BTA markets.
If applicable buildout conditions are met, these licenses may be renewed for additional ten-year terms. Renewal
applications are not subject to auctions. If a renewal application is challenged, the FCC grants a preference
commonly referred to as a license renewal expectancy to the applicant if it can demonstrate it has provided
“substantial service” during the past license term and has substantially complied with applicable FCC rules and
policies and the Communications Act. The licenses for the 10 MHz of spectrum in the 1.9 GHz band that we
received as part of the FCC’s Report and Order, described below, have 10-year terms and are not subject to
specific buildout conditions, but are subject to renewal requirements that are similar to those for our PCS
licenses.
800 MHz and 900 MHz License Conditions
We hold licenses to deploy our iDEN services in the 800 MHz and 900 MHz bands. Because spectrum in the 800
MHz and 900 MHz bands was originally licensed in small groups of channels, we hold thousands of these
licenses, which together allow us to provide coverage across much of the continental United States. Our 800
MHz and 900 MHz licenses are subject to requirements that we meet population coverage benchmarks tied to the
initial license grant dates. To date, we have met all of the construction milestones applicable to these licenses,
except in the case of licenses that are not material to our business. Our 800 MHz and 900 MHz licenses have
10-year terms, at the end of which each license is subject to renewal requirements that are similar to those for our
1.9 GHz licenses.
BRS-EBS License Conditions
We hold and lease FCC BRS and EBS licenses. We currently use this spectrum to provide fixed wireless Internet
access services to homes and small businesses using “first generation” line-of-sight technology. This service
operates across the country in 14 markets with approximately 18,000 subscribers. We operate our network and a
third party provides customer care. We intend to provide Wireless Interactive Multimedia Services, or WIMS,
using this spectrum along with other services, such as fixed point-to-point communications. In 2004, the FCC
ordered the 2496-2690 MHz band, or the 2.5 GHz band, reconfigured into upper and lower-band segments for
low-power operations, and a mid-band segment for high-power operations. Pending final FCC rules, no actual
reconfiguration “transition” to the new band plan has begun, but planning for this work has commenced, and we
expect field transition work will begin in 2006 and continue for several years. The FCC also affirmed its
prohibition of commercial ownership on approximately 62% of the total 2.5 GHz spectrum band, which is held
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